Newsbreak: Northwestern Energy and Parties Reach Agreement for Montana Rate Assessment, Could Result in Millions in Revenue Increases

NorthWestern Energy (Nasdaq: NEW) and various parties have reached an agreement in their Montana regulatory rate assessment of electric and natural gas rates. The agreement has been filed for review with the Montana Public Service Commission (MPSC). Among the parties that have reached an agreement are NorthWestern, the Montana Consumer Counsel, the Montana Large Customer Group, the Federal Executive Agencies, and Walmart Inc.

NorthWestern Energy has reached a regulatory rate assessment agreement with several parties in Montana for their electric and natural gas rates.

Agreement Details

The agreement for settlement provides information on various aspects of revenue increases for electricity and natural gas, the allocation of costs for services, the design of rates, adjustments to the base amount of revenues linked to property taxes and electric supply expenses, and regulatory policy matters associated with proposed changes in regulatory mechanisms.

If the agreement is approved, it will result in an increase in annual electric base revenues of approximately $67.4 million and an increase in annual natural gas base revenues of approximately $14.1 million.

The settlement is based on a 9.65% approved return on equity for electric operations and a 9.55% authorized return on equity for natural gas operations. This is consistent with the capital structure’s present permitted ROEs and a 48% equity operation, as reported by Globe News Wire.

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 Additional Settlement Terms

The settlement also includes the termination of the pilot decoupling program, which adjusts rates to recover fixed costs, and the agreement not to implement the proposed business technology rider. Instead, the settling parties agreed to update the Power Costs and Credits Adjustment Mechanism to adjust the base costs and provide for more timely recovery of deferred balances.

Additionally, the settlement addresses the future recovery of certain operating costs related to the Yellowstone County Generating Station and provides for the deferral of incremental operating costs associated with the Enhanced Wildfire Mitigation Plan. These measures aim to ensure the financial stability of NorthWestern Energy while balancing the interests of customers and shareholders.

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